ST. PETERSBURG, Russia (AP) — Japanese auto giant Toyota Motor Corp. on Friday opened a new assembly plant on St. Petersburg's outskirts — a sign of increasing investor interest in Russia's booming consumer market.
The plant, employing more than 600 workers, will produce 20,000 cars a year in the initial phase and later increase its output to 50,000, Toyota President Katsuaki Watanabe said. He said the output could eventually reach 200,000 cars a year.
President Vladimir Putin, who attended the plant's opening, hailed it as a good sign for Russian-Japanese relations.
''The relationship between Russia and Japan is getting better, and the opening of the plant is a serious step to increase the trust between the two countries,'' Putin said at the ceremony. ''The expansion of trade and economic ties between our countries will help the solution of other problems.''
The bilateral ties have been strained over a dispute over four islands at the southern end of the Kuril chain — known as the Northern Territories in Japan — which has kept the two countries from signing a peace treaty formally ending their World War II hostilities.
Former Japanese Prime Minister Yoshiro Mori, who co-heads a Russo-Japanese cooperation body and also attended the opening, praised the Russian Cabinet and local authorities for helping the project. He later had a meeting with Putin at the sidelines of the ceremony.
Toyota invested 5 billion rubles (US$202 million or euro140 million) into the plant, which took about 2½ years to build.
Watanabe noted a ''high potential'' of the Russian market, adding that Toyota hopes to boost sales. ''We hope to make our contribution in the development of Russian car manufacture,'' he said.
Putin said that a steady increase of personal incomes in Russia would continue to boost car sales, adding that the Russians now buy about 2 million cars a year.
Several foreign automakers have based operations in St. Petersburg, as Russia's former imperial capital has provided tax breaks and infrastructure and cast itself as a gateway for international trade.
Ford Motor Co. has a factory outside St. Petersburg, and General Motors Corp. also broke ground in 2006 on its first fully owned plant in Russia outside the city. France's Renault SA and South Korea's Kia Motors also have opened plants elsewhere in Russia.
Other foreign auto giants also are lining up to open assembly plants in the country, which is awash in petrodollars.
''The arrival of Toyota is a significant event by itself, and it's also a good sign for other investors,'' Putin said.
He said that the combined output of foreign carmakers' plants in Russia was expected to reach 1 million around 2011-2012.
